Would like to be able to control font color, bodl, and other format options for items in drop downs
Hi, and welcome to the forum! 
This can't be done within the dropdown itself, but you can do it on the inserted text by using an {if} command and then applying the styling on the contents within the {if}.
{note}Select the item {formmenu: bold; italics; normal; name=item}{endnote}
{if: item = "normal"}normal{elseif: item = "bold"}bold{elseif: item = "italics"}italics{endif}